A letter sent to Comvita shareholders by the company's board chairman Neil Craig shows he is confident Cerebos' takeover bid will lapse on December 22.

The bid made by the Singapore based company involved the purchase of shares for $2.50 each.

Comvita products are likely to keep moving without interference from potential new owner Cerebos as its takeover bid appears likely to lapse.

In his letter, Neil writes:

'We are pleased that this takeover offer is now effectively behind us. From the outset of the offer, we stated our belief that it undervalued Comvita by a very considerable margin.

As a result, we have attracted a great deal of media attention.

We have also come under intense scrutiny from Cerebos, other potential bidders, and the independent adviser who assessed the merits of the Cerebos offer for all shareholders and valued Comvita at $3.40 to $4 per share.

Our view is that this valuation range does not fully reflect the potential, therefore the takeover value of Comvita.”

The letter goes on to explain Neil's belief that Comvita has come through this scrutiny in good shape (bullets below quoted):

• Comvita's business model is the correct one and is the envy of many New Zealand exporters. Our growth strategy built on value-add product innovation, integrated and enhanced supply chain and control of our channels to market, is just starting to deliver significant and increasing returns to Comvita shareholders.

• Our prospects are strong, particularly in Asia. Over the last five years, we have delivered compound annual sales growth of 19 per cent and strong earnings growth. We are well positioned in the fastest growing markets of Asia, where sales have grown from $7.4 million in 2006 to an expected $33 million this financial year. We have over 100 employees in Hong Kong, which is our hub for Asia.

• Our products are highly efficacious and are backed by significant expenditure on the research of new and existing products. We spend our research funds wisely by collaborating with Government agencies and globally-recognised institutions. These include Auckland's Liggins Institute, John Hopkins University in the United States, the Technical University of Berlin and The University of Auckland, where we now have three post-graduate researchers and several support staff working on studies in support of Comvita products. Our research of the bio-active compounds within Manuka honey is world-leading and extremely advanced, resulting in significant intellectual property for Comvita.

• We have a robust Manuka honey supply chain. It is clear our dominant position in Manuka honey was a big attraction for Cerebos.

Neil's letter goes on to comment on his great confidence in Comvita with estimates that two thirds of Manuka honey sold from New Zealand by value is via Comvita:

'We have a very significant commitment to New Zealand apiarists built up from relationships spanning almost 40 years.

Increasingly, we provide significant resources and technical support to beekeepers and to the apiculture industry.

We also invest in research into Manuka plant varieties and reforestation programmes. Approximately 17 per cent of our supply is from our own hives.

These resources and relationships are difficult to replace quickly, especially for companies domiciled offshore.

Reflecting our confidence in our future as an independent company, we released financial guidance for sales for the year to 31 March 2012 of $91 million to $95 million and a normalised net profit after tax of $7.3 million to $8.2 million, ie 24.7 cents per share to 27.8 cents per share.

While there has been three months of diversion of management time and extra costs associated with the takeover offer, barring unforeseen events, we remain confident we will achieve these excellent results and continue to grow sales and profits in the 2013 financial year and beyond.

The support from you, our shareholders, during this difficult time has been nothing short of extraordinary, with many previously ‘silent' investors showing their support for Comvita both verbally and, in some cases, by buying shares on market.

We indeed have a strong and loyal shareholder base for which we, as a board, are thankful. Similarly, the offer has further engendered a resolute enthusiasm from staff for Comvita as a business with an outstanding future.

On behalf of the board, senior executives and staff of Comvita, many of whom are shareholders themselves, I would like to thank you for your support.

The ball is now in our court to repay the loyalty shown by you and deliver on our forecasts.”